Premier League clubs are expected to smash transfer records this summer and spend over £1bn in a single window for the first time.
Deloitte’s Sports Business Group is predicting Premier League clubs’ expenditure on new players will hit new heights in the forthcoming transfer window, following another season of revenue growth.
Collective revenues for the 20 clubs in England’s top tier reached a record £3.3bn in the 2014/15 season, according to Deloitte’s Annual Review of Football Finance published today, a figure projected to rise to £4.3bn next year.
Premier League clubs scored their second-highest collective pre-tax profits of £121m last season, a slight dip on the previous campaign as clubs racked up record receipts from wages, transfers and capital expenditure.
Premier League clubs’ wage costs increased by seven per cent to exceed £2bn for the first time, spending on new players hit a record £1.1bn across the season — more than double that of any other European league — and capital expenditure reached a new high of £305m.
Yet Deloitte’s Sports Business Group, which advises clubs on acquisitions and strategy, believes such outlay will be dwarfed over the coming months as Premier League clubs enjoy the riches of a new £8bn broadcast deal to snap up the stars of Euro 2016.
“A lot of Premier League clubs will already be going into this summer window, particularly with a major international tournament about to start, looking at which players they want to buy to push for the title next season,” Deloitte’s sports business Group senior consultant Andy Bull told City A.M.
“We’re expecting it to be a big summer transfer window anyway with the new TV deal starting next year, but with the addition of a major tournament, spending by Premier League clubs could easily reach £1bn which would be a new record.”
The Premier League was Europe’s most profitable league in the 2014/15 season, with a lower wages to turnover ratio than Spain’s La Liga, Italy’s Serie A and France’s Ligue 1. Such sound financial footing prompted an £870m spending spree last summer as the likes of Stoke City, Southampton and West Bromwich Albion, who are perhaps not expected to compete for major honours, all broke club transfer records.
Next season marks the beginning of a new Premier League broadcast deal worth nearly £3bn a season and at least £99m to every club.
By half time of the second live match broadcast in the UK next season, more television revenue will have been generated than by all the top-flight matches combined 25 years ago.
That will give Premier League clubs an even greater advantage over European rivals in the transfer market this summer, with collective operating profits potentially rising as high as £1bn next year, although English clubs could be asked to pay a premium.
“There’ll still be an elite few European clubs — Barcelona, Real Madrid, Paris Saint-Germain, Bayern Munich — who will be able to compete with the Premier League clubs for the very top talent,” said Bull. “But the difference is now all of the Premier League clubs can compete for the best talent in Europe, not just a handful.
“If an English club is looking at a player that will no doubt drive the price up because the selling club will know they can spend big.”